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A cautious Fed keeps rates on hold as tariff uncertainty lingers, gold outlook strengthens amid geopolitical risks, mortgage rates ease supporting housing, oil holds near range on OPEC+ expectations, and short‐term Treasury yields tick down.
🏦 Powell reiterates “wait and learn” on rate cuts
At an ECB forum in Portugal on July 1, Fed Chair Jerome Powell emphasized the central bank will “wait and learn more” about how tariffs affect inflation before cutting rates, resisting political pressure for immediate easing.
A cautious Fed stance keeps bond yields elevated and equity volatility intact, reinforcing the case for diversifiers—like real assets or floating-rate debt—to protect portfolios.
🥇 HSBC lifts gold price forecasts to $3,215/oz for 2025
HSBC raised its average gold price forecast for 2025 to $3,215/oz (from $3,015) and to $3,125/oz for 2026, citing persistent geopolitical risks, high debt levels, and U.S. fiscal uncertainty; spot gold recently traded near $3,348.50/oz.
A more bullish outlook on gold underscores its role as a non-correlated hedging asset amid policy uncertainty, offering long-term investors a valuable ballast in diversified portfolios.
🏠 US 30-year mortgage rate dips to 6.67%, lowest since early April
The average contract rate on a 30-year fixed mortgage fell to 6.67% in the week ending July 2—the fifth straight weekly decline and its lowest since early April—while the 15-year rate eased to 5.80%, as bond yields slipped on Fed delay expectations.
Lower mortgage rates can lift housing affordability and support both purchase and refinance activity, giving a modest tailwind to the housing sector even as higher borrowing costs remain a headwind.
💸 Warning of a looming U.S. debt spiral
Analysts warn that the recently passed U.S. tax and spending package could swell the deficit by over $3 trillion over the next decade, pushing the debt-to-GDP ratio toward 145% by 2050 (CBO) and potentially 200% by century’s end without corrective measures.
Rising fiscal burdens may drive higher risk premiums on Treasuries and constrain long-term growth. Investors should consider the potential for steeper yield curves and integrate credit-sensitive and inflation-linked strategies into diversified portfolios.
📊 10-year US Treasury yield eases to 4.26%
A modest pullback in long yields can enhance the relative appeal of bonds for income-seeking investors and may signal skepticism about near-term growth. It underlines the importance of managing duration exposure in fixed-income allocations.